FTC to Facebook: Honor WhatsApp’s privacy policies

UPDATED: The Federal Trade Commission has cleared Facebook’s $19 billion purchase of WhatsApp, but not before warning the social network to honor the mobile messenging service’s more stringent consumer privacy terms because failure to do so could be illegal.

Facebook has a lot riding on the proposed acquisition, which still needs the approval of other government agencies in the U.S. and in Europe.

WhatsApp has made a number of promises about the limited nature of the data it collects, maintains, and shares with third parties -promises that exceed the protections currently promised to Facebook users. We want to make clear that, regardless of the acquisition, WhatsApp must continue to honor these promises to consumers. Further, if the acquisition is completed and WhatsApp fails to honor these promises, both companies could be in violation of Section 5 of the Federal Trade Commission (FTC) Act and, potentially, the FTC’s order against Facebook.

That order refers to a 2011 settlement of an FTC complaint that Facebook “deceived consumers” by failing to keep promises to protect the privacy rights of its then 800-million members.

The FTC letter did not specifically say the agency cleared the deal. But in a statement, a Facebook spokeswoman said the company was “pleased the FTC has completed its review and cleared our acquisition of WhatsApp. Naturally, both companies will continue to comply with all applicable laws after the transaction closes.”

The Center for Digital Democracy, which asked the FTC to review the WhatsApp deal, praised the warning letter:

“We believe that despite claims that they would preserve Whatsapp’s more privacy-friendly approach, the ultimate plan was to expand its mobile data collection practices and fully integrate it into Facebook. Facebook’s future depends on its ability to successfully grow its mobile advertising, commerce, and payment applications. It did not spend $19 billion without planning to reap huge financial rewards by turning Whatsapp into an effective monetization machine for Facebook. The FTC is to be commended for sending a very strong signal that they will hold Facebook and Whatsapp accountable for their promises. The commission’s action has likely spoiled, for now, the plans Facebook has developed to turn its $19b shopping spree into even more digital gold for themselves.”